
The Siadar project, off the west coast of Lewis, was a joint venture between RWE Npower Renewables and Inverness-based Wavegen.
But RWE had confirmed it was no longer proceeding with the development.
It was hoped the scheme would generate 4MW of electricity by next year - enough to power 2,500 local homes.
Last year, ministers announced a ?6m allocation of funding to the 10-turbine project, under the Waters fund, supported by the government, Scottish and Highlands and Islands Enterprise and the European Regional Development Fund.
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